Shop workers battle boom and bust cycle in China’s retail market

01/08/2018

China’s retail sales grew by 9.3 percent in the first half of the year to stand at 16.1 trillion yuan, according to figures released by the Ministry of Commerce on 17 July.

However, these healthy-looking statistics disguise intense competition and overly-aggressive expansion in the retail sector which, combined with huge pressure from e-commerce, has led to many traditional retailers closing down. Business failures have left many employees out of a job, with no compensation and owed months of wages in arrears. In some cases, national retail chains went bankrupt leaving hundreds of workers in several different cities across China out in the cold.

As Walmart workers demonstrated in 2016, when the American retail giant tried to impose a flexible working hours system on its more than 100,000 employees, China’s shop workers cannot just be pushed around.

The number of worker protests in the retail sector recorded on China Labour Bulletin’s Strike Map in July more than doubled compared with the previous month. Strikes and collective protests occurred in a wide range of retail outlets including supermarkets, cosmetics companies, automotive sales and real estate agents, and accounted for about eight percent of all the incidents recorded in July.

Cosmetics company sales staff protest wage arrears

On 17 July, several sales staff working for cosmetics brand Limi (里美) blocked the entrance to the Watsons store in Chongqing where they worked protesting wage arrears. Their online posts attracted widespread support, with Limi employees in other stores noting that they too had suffered from wage arrears.

Staff told local media that they had not been paid since April. However, they were prompted to take action after management “suggested” they go on holiday for a month. This “suggestion” came after the company’s main office in Chongqing had closed down two days earlier. Moreover, it became clear that not only had Limi failed to pay salaries, it had reduced commission rates in all its stores in south and southeast China.

Staff urged Hong Kong-owned Watsons to provide evidence of their employment status after Limi refused to pay the wage arrears demanded, claiming that there was a discrepancy in their employment records.

The company did at least offer laid-off staff a detailed compensation package but dozens of workers felt the offer was unsatisfactory and staged a protest, holding up banners in front of the company headquarters.

MaxValu, owned by Japanese retail giant Aeon, stated that it had been forced to close the store after suffering continuous losses following the closure of two other Qingdao stores in 2014 and 2017. Local media reported that the company has been struggling to survive in a competitive retail sector. After failing to appeal to high-end consumers, the supermarket brand then turned to the bargain end of the market, but was beaten out by local supermarket brand Liqun.

Story Highlight

It is the duty of the union to represent workers in negotiations with employers, it should not just sit on its hands. Neither should the Trade Union Law just exist on paper. The union should shoulder its legal responsibilities towards workers by defending their rights.

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